City and County of Honolulu News Releases

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CITY'S STRONG GENERAL OBLIGATION BOND RATINGS AFFIRMED   (Fri., July 8, 2011)—Mayor Peter Carlisle today announced that Moody's Investor Services and Fitch Ratings affirmed the City and County of Honolulu's existing general obligation bond ratings at "Aa1" and "AA+" respectively, which are the second highest possible ratings for municipal bonds.                In addition, both rating agencies affirmed the City's "Stable" outlook. Moody's said, "The Aa1 rating primarily reflects the city's sizable economic base, above average resident wealth, and sound financial operations with recently improved reserve levels, as well as manageable debt profile."               Of particular note, Fitch stated, "The city's financial position remains sound, with healthy fund balance levels and stable revenues. Property tax receipts have remained relatively stable despite the housing downturn."                "Unlike many Mainland cities, Honolulu remains financially strong due to its conservative management, coupled with a diversified economy and stable revenue base," said Mayor Carlisle. "The City's continued success at controlling spending and its considerable financial flexibility underlie these strengths."               "These favorable ratings allow the City to continue borrowing at a lower interest rate, directly benefitting the public we serve by keeping our cost of borrowing as low as possible," said Michael Hansen, Director of the Department of Budget and Fiscal Services.     The City is moving forward with the sale of approximately $312 million of General Obligation Bonds, Series 2011A&B. The Series 2011A bonds are being issued to finance various capital improvement projects in the City. The Series 2011B refunding bonds are being issued to refinance certain outstanding general obligation bonds for debt service savings. The Series 2011A&B Bonds will be exempt from both federal and State of Hawaii income taxes.    A special opportunity is being offered for Hawaii residents to place orders for the bonds in advance on Tuesday, July 12th. The sale is expected to be completed on Wednesday, July 13th. Bank of America Merrill Lynch will serve as the lead underwriter for the bond sale with Piper Jaffray & Co. serving as the co-manager. For more information, please contact your broker or refer to the City advertisement that appeared in the July 7th edition of the Honolulu Star-Advertiser.     -30-     Media contact: Louise Kim McCoy, Mayor's Office, 768-7798.